1. Romania is heading towards an annual growth of 4% in 2016. What are the prospects for growth for Caroli Foods Group in 2016 and what are the prospects for 2017?
In 2016, we continued to consolidate our leadership and growth in the market, following our ambition to continuously respond to our consumers’ needs and thus remain their first choice. Our growth for this year was sustained by leveraging key market trends and context. A lower VAT rate and the economic context brought an increase in local consumption, that Caroli Foods Group addressed by customizing offers accordingly. Moreover, our studies showed that Romanian consumers are increasingly concerned with their wellbeing, so they take a more careful look at quality recipes and natural ingredients. We had anticipated this trend a long time ago; as a result, our product development strategy included a strong focus on quality products that came ahead of the market. Our permanent commitment is to deliver the best products at the best prices and we do this by continuous improvement and investments in our production process. As a result, our latest product category launch, EXTRA range under Caroli brand, with more than 80% meat, generated double digit growth in the first half of this year and strongly sustained our growth. Another milestone of this year was the launch of a new range of products with low fat content under Sissi brand. For 2017, we will continue what we have been building in the previous years and we will come up with products and strategies in order to satisfy consumers’ needs. In this way, Caroli aims to offer a great experience to the consumers.
2. The market in which Caroli Foods Group conducts its business has been the subject of one main challenge and opportunity in 2016: the lowering of the VAT rate to a historically low level for food. What was the effect of this factor on your business?
The lowering of the VAT rate generated an increase in consumers’ consumption that was also reflected into our business, but one very important and impactful effect was upgrading the consumer’s choice. The change will bring a real revolution in the market as it generated price reductions of around 10%. Now consumers can choose the products that fit their lifestyle and their wellbeing concerns. We are proud to have built not only a strong business in Romania, but to have helped build the market, as well. 2016 saw a decrease in black market activity and also an increase in loyal competition.
3. Do you think these factors will have impact beyond 2016? Please detail.
Romania was among the countries with the highest increases in the total retail trade volume in September, growing by 9.7 percent compared with the same month of 2015. We have strong reasons to anticipate a continuous growth of 5% and consolidation also in the following years. On top of market conditions, healthier nutrition choices and a balanced lifestyle are on a strong upward trend. The new milestone in this respect will be a responsible consumer, that chooses based on brand values and premium benefits.